Cell therapy plays an important role in multidisciplinary management of the two major forms of central nervous system (CNS) injury, traumatic brain injury and spinal cord injury, which are caused by external physical trauma. Cell therapy for CNS disorders involves the use of cells of neural or non-neural origin to replace, repair, or enhance the function of the damaged nervous system and is usually achieved by transplantation of the cells, which are isolated and may be modified, e.g., by genetic engineering, when it may be referred to as gene therapy. Because the adult brain cells have a limited capacity to migrate to and regenerate at sites of injury, the use of embryonic stem cells that can be differentiated into various cell types as well as the use of neural stem cells has been explored. Preclinical studies and clinical trials are reviewed. Advantages as well as limitations are discussed. Cell therapy is promising for the treatment of CNS injury because it targets multiple mechanisms in a sustained manner. It can provide repair and regeneration of damaged tissues as well as prolonged release of neuroprotective and other therapeutic substances.